“This interview with David Lekach, owner of Dream Water, takes us though a well thought out marketing plan that eventually created tremendous value for his company,” states Sam Thompson, a Minneapolis business broker and the president of M&A firm Transitions In Business. “He shares his frustration with how the process of selling your business is never a sure thing. How the closing date often can be pushed back numerous times.”
David Lekach started Dream Water; a natural sleep aid bottled in a 5 oz shot similar to the famous 5-Hour Energy Drink.
Lekach built Dream Water up to almost $10 million in annual revenue before selling it to Harvest One, a cannabis company, for $34.5 million in cash and Harvest One stock.
One of the biggest takeaways for aspiring value builders is staying focused on what you’re good at and outsourcing the rest. In Dream Water’s case, Lekach saw his role as “selling Dream Water, not making it.” That meant he outsourced the manufacturing, packaging, and distribution of Dream Water to a co-packer while Lekach and his team focused on selling it. They launched Dream Water in New York, with a catchy public relations hook of helping “the city that never sleeps get some rest.” Instead of focusing on gas stations where 5-Hour Energy had a stronghold, Lekach reasoned that sleep aids are sold at a pharmacy, so they partnered with giant retailer Duane Reade for their launch in Manhattan.
There’s lots more to learn from Lekach including:
- How to calculate Internal Rate of Return (IRR).
- The most significant mistake founders make when raising money.
- How to make sure an acquirer follows through on an LOI.
- The dirty little secret of selling to the likes of Walgreens and Wal-Mart.
Warning: this episode includes some coarse language.